If you’re researching condos for sale in the Ottawa area, or anywhere across the country, your focus shouldn’t be limited to finding the perfect unit in the right neighbourhood. Buying a condo means that you are also investing in how well the condominium corporation’s board of directors is protecting your financial, legal and practical interests as well as those of all other condo owners.
One condo board, many responsibilities
The condo board—also known as the board of directors—is a group of people who have been elected by owners to represent them in all matters related to managing and funding the “common elements”—from the exterior of your unit to walkways, parking, landscaping, and trees. In general, the responsibilities of a condo board include:
• creating an annual operating budget
• developing a reserve fund plan
• overseeing deposits to and withdrawals from the operating and reserve funds
• collecting common expenses from owners
• ensuring the common elements are maintained (impacting quality of life and curb appeal)
• enforcing provincial laws related to condos, as well as condo-specific bylaws and rules
• preparing the status certificate
• hearing from and communicating with owners
• hiring service providers, contractors and counsel as needed to help them fulfill these and other responsibilities
Having a good understanding of each of these duties will help you evaluate whether the condo board is meeting all of its commitments.
A poorly run board could have serious consequences
The condo board is the gatekeeper of your money and your home’s value. If the board is inexperienced, makes poor decisions or has different priorities than you do, you could be left with rising maintenance fees, unexpected special assessments, declining or neglected property standards, a mismanaged budget, lawsuits by owners against the condo corporation, and more. Study your condo board’s track record to help you decide whether it meets your expectations.
Ask owners what they think
If possible, talk to a few of the existing owners about the board. What strengths and weaknesses do board members have? Do they keep owners informed about issues? Do owners feel comfortable approaching the board about concerns? The answers you get will offer clues about whether the board is doing its job.
Add your voice to the board
At the very least, you should attend your Annual General Meetings (AGM) or request a proxy form so that your votes can still be counted. Although you have opportunities to register complaints or propose ideas for the condo board’s consideration throughout the year, the AGM will give you direct access to the board of directors and allow you to voice your thoughts in the presence of other owners regarding the financial, legal and practical decisions they are making on your behalf. Annual budgets are approved by owners at AGMs. This is also where condo board members are elected.
If you decide to purchase a condo, you may want to consider running for a seat on your condo board. You can be nominated in advance of the AGM or at the AGM. While there is definitely a learning curve when it comes to familiarizing yourself with the language and procedures of condo corporations, there are also many advantages to holding a board of directors position. As a condo board member, you’ll:
• have the power to improve the value of your condo by fixing aging common elements and adding high-value features
• be the first to know about problems, liabilities and upcoming major expenses
• ensure the budget, operating fund and reserve fund are being properly managed
• select or replace service providers and contractors who are competitively priced and meet the terms of their contracts
• get to know, in detail, what priorities, issues and concerns residents have on an ongoing basis
Remember, though, that as a board member you are representing all the owners in a condo, not just yourself. So be prepared to put your own feelings aside for the greater good of the corporation. Do not take this decision lightly, but don’t dismiss it either. Being a board member is an important job that impacts everyone in your condo. It can require a significant time commitment, but it’s a great way to stay informed and make sure that your asset maintains its value. If you want to help steer your condo in the right direction, take control of your future and give it a try.